TaxTMI 
TaxTMI 
2017 (10) TMI 276
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....bove said units are not of sale transaction. Therefore, the valuation is governed by Rule 8 of Central Excise Valuation (Determination of Price of Excisable Goods) Rules, 2000. Accordingly, the appellants should have applied the value of 115% upto 04/08/2003 and 110% upto 05/08/2003 as per amended Rule 8, of the cost of production or manufacture of such goods. The adjudicating authority applying Rule 8 confirmed the demand of differential duty amounting to Rs. 41,41,631/-, imposed penalty of equal amount under Rule 25 and also demanded interest under Section 11AB. Being aggrieved by the order-in-original, the appellant filed an appeal before the Commissioner (Appeals) who held that the transaction between the appellant and the manufacturers are one of sale and purchase. Accordingly, demand is not sustainable, the appeal was allowed, therefore, the revenue is before us. 2. Shri N.N. Prabhudesai, Ld. Superintendent, (AR) appearing on behalf of the Revenue reiterating the grounds of appeal submits that the Ld. Commissioner has held that the transaction is of sale and purchase whereas as per the definition of sale in terms of Section 2 (h) of Central Excise Act, 1944, the important ....
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.... Industries - 2007 (212) ELT 358 (T) b) Upheld by Supreme Court - 2015 (325) ELT 635 (SC) c) Rado Tyres Ltd. - 2004 (174) ELT 218 (T) d) Video Master - 1996 (88) ELT 117 (T) e) Modern Food Industries - 1988 (37) ELT 294 T) 4. We have carefully considered the submissions made by both sides and on perusal of records, we find that the transaction between the respondents and two companies, M/s.Aquagel Chemicals Pvt. Ltd. Gujarat and M/s.Sree Rayalaseema Alkalis and Allied Chemicals Ltd. Andhra Pradesh, are of sale on the basis of following invoices: INVOICE NO.31 4.1 From the aforesaid invoices, it is clearly observed that the respondent, M/s.Hindustan Lever Ltd. have sold the goods to M/s.Aquagel Chemicals Pvt. Ltd. Gujarat and M/s.Sree Rayalaseema Alkalis and Allied Chemicals Ltd. Andhra Pradesh. It is also observed that being a sale transaction, the Central Sales Tax @4% was also charged in the bill. As per the certification given in the bills also it is clear that the goods, i.e., soap noodles was sold by Hindustan Lever Ltd. to the said two companies against form C. It is further observed that both the companies after purchase of soap noodles and also various ....
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....urers (purported buyers). The following facts are not under any dispute. The appellant is manufacturing toilet soap noodles chargeable to excise duty and these noodles are sold, as per appellant, under an agreement to these two separate legal entities, which are in no way related to the appellant. These two (manufacturers) manufacture toilet soaps under the brand name of the appellant out of the soap noodles and supply back entire quantity so produced to the appellant. While supplying the goods back the duty on soaps is paid on MRP basis. The appellant based on the purchase order and negotiated price issue commercial invoice and central excise invoice while clearing noodles to these two manufactures. In the similar way the finished goods, i.e. toilet soaps manufactured by these two manufacturers are received under the cover of commercial as well as central excise invoices. The departments contention is that the transaction between the appellant and the manufacturers is not that of sale but the manufacturers are working as job worker for the appellant as the entire quantity manufactured out of soap noodles supplied to the manufactures are received back by the appellant. There is ....
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....the transaction between the transfer and transferee. Merely because there is no payment in cash or because there is book adjustment, it cannot be claimed that there has been no sale. Book adjustment is also a form of payment. Once we hold that these transactions are in the nature of sale, then it is quite clear that the learned Collector (Appeals) has erred in coming to the view that the goods are not ordinarily intended for sale. The fact is, that they are in fact manufactured for sale to the sister units. In view of the consistent pronouncements, as regards what constitute the sale and in view of the fact that the department has not brought any evidence except mere allegation that the transaction between appellant and the manufacturers are sham and not actual sales. The transaction between the appellant and the manufacturers are held to be one of sale and purchase and accordingly the demand is not sustainable. Consequently the penalty is also not leviable. As such in view of the above findings, the appeal is allowed. 4.3 From the reading of the above findings, we find that the Ld. Commissioner (Appeals) has come to the conclusion that the transaction is of sale, dealt with ....
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.... MEMORANDUM HAS BEEN EFFECTED BY US IN THE REGULAR COURSE OF OUR BUSINESS. THIS GOODS ARE SOLD ON THE UNDERSTANDING THAT THE BUYER AGREES TO THE TERMS AND CONDITIONS OF SALE. CST against form C LST No. 444312/8-56 Dt. 01/04/96 CST No. 410208/C/128 Dt. 01/04/96 FOR HINDUSTAN LEVER T thisismich Authorised Signatory Mar Tier 411/05 12. P. AKKAR) Document 2 Hindustan Lever Ltd. C-9 MIDC Area, Khamgaon, Dist BULDANA 444 303 Phone: 07263-277364/277365 Customer Name Sree Rayalaseema Alkalles & Allied Chem. Ltd Address Regd. Office & Factory: Gondiparia KURNOOL (A.P.) INDIA Qty (MT) Description 57.576 Toilet Soaps Noodles as per given below details Date 31.08.03 PI No UKN/URL/03/20 31.08.03 UKN/URL/03/21| 01.09.03 UKN/URL/03/24 03.09.03 UKN/URL/03/25 03.09.03 UKN/URL/03/26 04.09.03 UKN/URL/03/27 Qty (Tn) Vch. No GP No 9.444 AP7X1127 9.323 AP16T3583 10.374 AEE 4664 3040 3047 3051 9.993 AP26U3294 10.123 AP7U414 3080 3081 8.319 ADG1395 3090 Rs.Twenty Three lakhs Fifty Three Thousand Two Hundred Ninty Four only. 2353294.2 08031 INVOIC....